EmailForest Labs (FRX $35.40 -0.32) lowered guidance primarily due to evolving conditions in the Lexapro / escitalopram market; now expects fiscal year 2013 EPS Range of $0.65-0.80 from $1.20-1.35 prior. Following the expiration of Lexapro's patent exclusivity in March 2012, rapidly evolving and unanticipated conditions in the Lexapro / escitalopram market necessitate revisions to the Company's previous forecasts for both branded Lexapro sales and royalty income earned on sales of the escitalopram authorized generic, distributed by an independent third party. The combined impact is a reduction in projected fiscal 2013 earnings of approximately $0.25 per share for the full fiscal year. Royalty income earned on sales of the Company's authorized generic version of Lexapro is now expected to be $60 million, down from the previous forecast of $115 million.
In addition, sales of branded Lexapro are now expected to be approximately $215 million for the fiscal year compared to the previous estimate of $250 million. Separately, Forest distributes Levothroid, a synthetic levothyroxine product for the treatment of hypothyroidism, pursuant to a distribution agreement with the product's manufacturer and holder of the product's NDA. The manufacturer has notified Forest that the FDA has indicated it has regulatory and quality concerns with respect to the facility where the product is manufactured. The manufacturer has stopped manufacturing and shipping product from its facility. At this time, Forest understands that the manufacturer is continuing to work with the FDA to address the FDA's concerns. Pending further details Forest has discontinued shipping Levothroid to its customers and does not know how long the product will be unavailable. Forest's annual sales of Levothroid are approximately $17 million. If the manufacturing disruption goes on for an extended period of time, or if the product is subject to a recall, the loss of Levothroid sales and associated costs could reduce earnings by approximately $0.03 per share for the full fiscal year. The Company now expects reported fully diluted earnings per share for fiscal year 2013 to be in the range of $0.65 to $0.80 per share and non-GAAP fully diluted earnings per share (which excludes acquisition related amortization) of $0.95 to $1.10.
